The report

COLLEGE STATION - The Texas A&M athletic department lacks control of its finances, according to an audit obtained by the Express-News.

The department "requires significant improvement in its financial controls and processes," according to the 25-page report that reviews a span from September 2007 to December of last year. Six accountants from the A&M system performed the internal audit.

Two high-ranking A&M officials said Wednesday that athletic director Bill Byrne's job was not in jeopardy based on the findings. Byrne, who couldn't be reached for comment Wednesday night, addressed the audit in his weekly online column.

"The auditors also made one very serious observation," Byrne wrote. "During the period under audit, they believed that we had limited monitoring of, and limited accountability for, daily financial operations. And during that time, the auditors were correct."

Phone messages left for the audit's director and project manager were not returned Wednesday night.

Byrne said he's fixed the problems by changing management in the business office and that he's "confident that our business operations are being conducted effectively and efficiently today."

The report also says the department did not prepare a balance sheet, and therefore "financial reporting activities performed by the Athletic Department do not provide a complete picture of its financial position."

"In fiscal year 2008, over $2.5 million in revenues and expenses were not included in the department's financial statements," the audit says. "The exclusions included $1.1 million in revenues and expenses routed through the 12th Man Foundation and $1.4 million of product revenues and expenses provided from athletic apparel contracts."

The 12th Man Foundation is the fundraising arm for the athletic department. The athletic department also "was not required to comply with ... university rules by processing expenses directly through the 12th Man Foundation instead of the University's business functions," the audit says.

As an example, the audit cites the department's building of a $1million equestrian complex through the foundation instead of the university.

The foundation's president, Miles Marks, said via e-mail Wednesday night that "the 12th Man Foundation exists to support the financial needs of the athletic department. From time to time there have been instances where asking the 12th Man Foundation to purchase something on behalf of Athletics would get that item quicker than going through the standard university processes.

"The auditors' evaluation was that the process needed to be more closely monitored by the university's office of finance, and those changes have been put in place by the university."

A&M athletics is no stranger to fiscal troubles this year. In June, then-university president Elsa Murano revealed as part of her annual review that the university had loaned the athletic department $16 million four years ago, and that the department must follow a strict business plan to now begin repaying the 10-year loan. A month later, Byrne slashed 17 jobs from the athletic department.

The audit reviews the department's fiscal problems on a multitude of fronts and summarizes, "These weaknesses have hindered the Athletic Department's ability to achieve and maintain financial stability."

Byrne wrote in his weekly column that "many" of the audit's recommendations have been put into place, "and the others will be in place shortly."